He would turn down 7Mil + a starting role for less money here as a backup (if we re-sign KL)?

Besides it doesn't work that way. We will extend him a QO of 3.2mil. We can't then offer him 5mil or change the amount. Either he accepts that QO over any offer made or he signs an offer sheet and we decline/match.

Not sure, but I suppose we can decline the QO and allow him to become a UFA and then make him our own offer.

No, that's completely wrong. Of course we can negotiate a new contract with him. Extending the qualifying offer just means he is free to accept it at any time, and that if he accepts another team's offer we can match. In no way does it restrict our ability to offer him a contract.